IBON Foundation
Research group IBON said that a wage hike towards a family living wage is a more than fair 50-50 split of profits between employers and Filipino workers. The group said that a meaningful wage hike is urgent for nominal wages to keep up with the rising cost of living. IBON stressed that raising the minimum wage to a living wage corrects decades of injustice where workers create huge profits for employers but receive meager wages.
IBON said that a Php690 across-the-board wage hike would raise the average Php440 minimum wage nationwide to the current P1,207 average family living wage nationwide. The wage hike is equivalent to 49% of profits across all establishment sizes and would divide profits more or less equally between employers and workers.
Broken down, the wage hike is equivalent to 54% of profits in micro, 53% in small, and 46% in medium and large firms. The group said that the hike is easiest for medium and large corporations, while the government can help smaller firms with wage subsidies or other support.
IBON said that a Php690 wage hike gives substantial immediate relief to millions of workers and their families. It also corrects how wages have lagged behind productivity for decades, inordinately boosting profits.
Measured in real terms and adjusting for inflation, worker productivity doubled and grew by 88% while the average minimum wage fell by over 22 percent between 1989 and 2023. Employers have pocketed this growing productivity as profits for decades instead of giving workers the fair compensation that is due to them.
IBON said that the average minimum wage across all regions is only Php440 or just a little over one-third (36%) of the Php1,207 average family living wage (FLW) nationwide for a family of five, as of March 2024. The NCR has the largest minimum wage of all regions at Php610, but this is barely half (51%) of the Php1,197 FLW. The gap is even worse in BARMM – the region’s Php361 minimum wage is not even one-fifth (18%) of the Php2,053 FLW. ###
* Wage hike impact is estimated using the Philippine Statistics Authority’s (PSA) data for average daily basic pay (ADBP) in 2022 compared to profits computed from the Annual Survey of Philippine Business and Industry (ASPBI) for 2022, the biggest survey of firms in the country with a sample size of 38,000 firms.
